Telecom Industry Sounds Budget Alarm: COAI Pushes for Urgent Fee Cuts, GST Relief to Save 5G Expansion
Ahead of Union Budget 2026, telecom operators urge the government to cut licence fees, ease GST burdens, reform spectrum pricing, and unlock funds to sustain 5G rollout and support Viksit Bharat.
In an attempt to pressure the government to initiate immediate financial reforms to alleviate the pressure, the telecom industry in India has raised a high pitch before the Union Budget 2026 to ease the pressure and protect the future network growth. Through the Cellular Operators Association of India (COAI), the telecom companies have cautioned that rationalisation of levies and taxes is necessary to ensure that a long-term investment in next-generation connectivity technology like 5G is not significantly affected. The industry cites that its requirements are revenue-neutral to the exchequer, but also essential in ensuring cash flows, enhancing affordability, and increasing telecom infrastructure, which it terms a base enabler to the Indian digital economy and the vision of the Viksit Bharat by government.
Request of Cutting Short in Licence Fee and Regulatory Levies
This is because the demands of COAI centre on the reduction of licence fees, which at present are at 3 percent of Adjusted Gross Revenue (AGR), to between 0.5 and 1 percent. The association still believes that the lower rate is sufficient to meet administrative expenses and reduce financial strain on operators. COAI has also sought a pause on further contributions to the Digital Bharat Nidhi, which currently collects 5 percent of AGR, until the existing unused corpus is fully deployed by the Department of Telecommunications.
Push to GST Relief and Improved Cash flow management
The telecom industry too had requested exemption of Goods and Services Tax (GST) on regulatory payment including licence fees, as well as, spectrum usage charges. Instead, it has suggested the lowering of GST rate under Reverse Charge Mechanism to 5 percent. One of the major demands that will help in enhancing liquidity is to permit the operators to use the existing balances under the Input Tax Credit to offset such GST liabilities.
Pricing Reforms to enable 5G and Beyond Spectrum
COAI has demanded a wider redefinition of spectrum pricing and assignment models with the argument that telecommunication ought to be considered as a horizontal value-added facilitator to all industries. According to the industry, the reforms are necessary to maintain long-term investment, speed up the rollout of 5G, and build the Indian digital foundation.
